China's banking regulator on Tuesday gave approval to five new private banks, bringing the total number of private lenders to 16.
The five banks will be in Beijing, Jiangsu, Jilin, Liaoning and Shandong, according to the China Banking Regulatory Commission (CBRC) website.
Each of the banks will be co-sponsored by at least two private capital providers.
Notably, two of them will be headquartered in China's northeast rustbelt region -- Liaoning, Jilin and Heilongjiang provinces -- a traditional industrial base bearing the brunt of the country's economic slow down.
A document issued by the State Council last month to rejuvenate the northeast and stabilize its economy said at least one private bank should be set up in the region by the end of next June.
The bank in Liaoning's capital city of Shenyang will complete preparation in six months and then file an operation application to CBRC's Liaoning office.
The bank will provide financial services mainly to private enterprises and high-tech industries.
In 2014, China approved a pilot scheme setting up five private banks to give private capital a bigger role in the country's financial system.
The new private lenders are expected to boost financial support for smaller firms, as the state-owned lenders usually favor state-owned enterprises.
Small-and medium-sized enterprises account for around 60 percent of China's gross domestic product and some 80 percent of new jobs, but they are struggling to cope with weaker global demand and tight credit.
Data from CBRC showed that total assets of the first batch of five private lenders reached 132.93 billion yuan (around 19 billion U.S. dollars) at the end of September. The non-performing loan ratio rose slightly to 0.54 percent.